Deals in southern Connecticut offices has surged more than 40 percent (iStock)
Interest in small suburban offices is picking up as more people continue to work from home, and relocate outside of major urban centers.
For IWG, the short-term office company, deals for its downtown New York offices have collapsed by 30 percent since the virus outbreak, while activity in southern Connecticut has surged more than 40 percent, according to Bloomberg. Similarly, sales of small offices accommodating one to two people have jumped 19 percent.
IWG recently indicated that it would close up to 20 percent of its flex office spaces in Manhattan, as its Regus subsidiary puts locations throughout the city into Chapter 11 bankruptcy proceedings.
Still, the suburban migration is happening, and office landlords are responding. “This shows the current trend of buyers wanting more space — inside and outside of the house,” London-based analyst Iwona Hovenko of Bloomberg Intelligence told Bloomberg.
Few employees have returned to their offices in New York City: In Manhattan, just 10 percent of workers have so far made a comeback. Experts originally projected that 26 percent of employees would return to their offices by the end of the year.
Rendering of new Wolfsonian-FIU Museum by Zyscovich Architects
A super majority of Miami Beach’s electorate approved the Wolfsonian-FIU’s plans to expand its footprint on Washington Avenue, one of the city’s long forgotten retail streets that is now undergoing redevelopment.
On Election Day, nearly 64 percent of city voters approved a ballot question asking them to increase the museum’s Floor Area Ratio, or FAR, to accommodate a 25,000-square-foot expansion and renovation of the Wolfsonian-FIU’s existing home, a Spanish Renaissance-style building with Art Deco influences. The vote also establishes the Wolfsonian Arts District.
“We’re excited that voters expressed support for The Wolfsonian–FIU’s vision on Election Day,” a museum spokesperson said in a statement. “It’s clear that Miami Beach residents value the arts and recognize the museum’s opportunity to invest even more deeply in bringing culture to the community.”
The FAR will increase from 1.5 to a maximum of 3.25 while capping the maximum height to 75 feet for properties in the Wolfsonian Arts District, at the northeast corner of 10th Street and Washington Avenue. The expansion will allow Wolfsonian-FIU to increase the number of collections on view, create a new lobby and a storefront presence on Washington Avenue. The new structure may also be used for state-of-the-art classrooms, studios, and a digital lab.
The final design by Zyscovich Architects still requires approval from the Miami Beach Historic Preservation Board.
Washington Avenue is gearing up for a hotel, office and co-living development boom. Last week, developer Eric Birnbaum announced he is partnering with singer-songwriter and producer Pharrell Williams and hospitality mogul David Grutman to create the Goodtime Hotel, a 266-room hotel on Washington Avenue between Sixth and Seventh streets, which is set to open early next year. Birnbaum’s Dreamscape Companies will lead development of the seven-story building, a $200 million project that marks the first major new project on Washington Avenue in years.
Meanwhile, Developer Rishi Kapoor is bringing a mixed-used co-living and hotel project to 1260 Washington Avenue. The Historic Preservation Board unanimously approved the demolition of a one-story retail building constructed in 1948. It will be replaced with a six-story building with 56 hotel rooms, 49 co-living units and suites, a 104-seat restaurant, a rooftop pool deck, and micro-retail, according to records filed with the city. The neighboring four-story office building at 1234 Washington Avenue, which was built in 1961, will be renovated and preserved.
Clockwise from left: Red Apple Group CEO John Catsimatidis, Cervera Real Estate’s Alicia Cervera Lamadrid, Florida developer Jeff Greene, Joy Construction’s Eli Weiss, Douglaston Development’s Jed Resnick and George Fontas (Getty; iStock)
From an undisclosed location in Manhattan, billionaire developer and local radio host John Catsimatidis told New Yorkers that President Donald Trump’s chances of winning the 2020 presidential race looked good.
“The betting line in Las Vegas is laying 3 to 1 for Trump to win,” he said on conservative talk radio station 77 WABC late Tuesday, while “manning the party desk” for the station’s watch event.
Though the president echoed this confidence early Wednesday morning, by the afternoon, no clear victor had emerged. The fate of the presidential election falls to several key swing states and may not be determined for several hours, if not days, as millions of mail-in ballots are counted. As of 12:30 p.m., former Vice President Joe Biden was close to winning crucial states Wisconsin and Michigan, with Democrats confident that he would, according to the New York Times.
Reached Wednesday, Catsimatidis, CEO of the Red Apple Group, didn’t seem swayed, doubling down on his support for the president.
Other real estate industry vets who spoke with The Real Deal in the election’s aftermath were similarly unfazed, saying they expected to wake up to a deluge of results and conflicting reports.
Still, some were uneasy at the idea that results could remain uncertain for a prolonged period.
“I’m not surprised at all. The country is deeply divided,” said George Fontas, a lobbyist whose clients have included major real estate investors and developers, including LeFrak, Thor Equities, Silverstein Properties, the Witkoff Group and Cammeby’s International Group. “There is no strong consensus one way or the other between the parties and between people who think that their country is on the wrong path.”
Others said they were anxious about what the election will mean for the federal government’s response to the coronavirus crisis.
“There’s a lot at stake here. I think that it is unfortunate that it is framed as a Trump versus Biden paradigm,” said Joy Construction principal Eli Weiss, adding that he is focused on whether another federal stimulus will be approved in the next 90 to 100 days, regardless of who wins. “To me, it’s us against a global pandemic. We’re fighting for our lives — literally and economically.”
Weiss noted that as an affordable housing developer in New York, he is still concerned with the outcome of next year’s mayoral and City Council races.
Jed Resnick, chief operating officer of Douglaston Development, agreed that local races are usually his main concern, but said this year, all eyes are on the presidential election and Washington’s response to the pandemic.
“In a typical year, local politics are more important than federal politics — but the single biggest challenge facing real estate and all Americans is Covid,” said Resnick. “That’s the elephant in every room.”
The real estate industry has watched the presidential race closely, in part because of Biden’s proposed changes to tax breaks, including 1031 exchanges and Opportunity Zones. Though the Democratic challenger hasn’t unveiled a detailed tax plan, some are worried he could target other favored tax maneuvers that drew attention during the Trump presidency, including depreciation.
FIA Capital Partners’ David Goldwasser, who assists owners of distressed real estate properties in New York, Florida and other markets, said if the election is disputed and takes weeks or even months to sort out, some real estate investors may try to limit their exposure to Biden’s proposed reforms.
“I think people will be fully exploring the 1031 exit … or some type of tax shelter to replace that 1031 in advance, because they don’t want to be left holding the bag,” Goldwasser said.
U.S. stocks rose Wednesday, despite the uncertainty over the results. Developer MaryAnne Gilmartin said the markets could likely withstand another week or two of not knowing who will be president, given that delays were widely expected. But if the outcome isn’t revealed for weeks or months, confidence would likely erode.
“Uncertainty is bad for our business. It is bad for any business,” she said. “Uncertainty can produce panic, it can lead to people shorting things they previously felt good about.”
Florida developer and billionaire Jeff Greene said Republican presidents are typically more beneficial to business interests in the short-term, given the party’s aversion to regulation and raising taxes. But Greene, a former Democratic gubernatorial candidate in Florida, thinks Biden will promote important environmental policies and boost the middle class.
“I think we have to think beyond the present and provide for a stable currency, interest rates that reasonably reflect inflation and allow the market to be more freer in that space,” he said.
For now, as with the rest of the country, the industry will have to wait and see how the race plays out.
“As long as we have a clear election and peaceful and smooth transition of power, we’re going to be fine as we always have been in the U.S.,” said Alicia Cervera Lamadrid, managing partner of Miami-based Cervera Real Estate, who voted for Trump. “It would have been nice to have a clear winner. But we have to be patient, and we’ll get there.”
But some have prepared for unrest. A number of retailers along shopping arteries in New York City and Los Angeles boarded up their stores. Protests occurred in cities including Washington, D.C., and Seattle, but they were reported to be largely peaceful.
“In general you want markets to be stable and you want clarity,” said Miami developer Avra Jain. “Whatever happens, you hope people will accept it. What you don’t want is for people to incite the situation and encourage violence.”
Katherine Kallergis, Georgia Kromrei, Keith Larsen and Akiko Matsuda contributed reporting.
By a slim margin, city voters rejected Terra’s proposal to redevelop the Miami Beach Marina, replacing a commercial building anchored by Monty’s Sunset with a 38-story luxury condo tower.
According to the final vote tally, 51 percent of Miami Beach’s electorate voted no on a ballot question asking residents to sell the air rights above the retail complex to Terra, which partnered with the marina’s operator Suntex on its proposal. Roughly 48 percent of voters said yes.
In a separate ballot question, Terra and Suntex managed to convince voters to approve their long-term lease to operate and upgrade the marina, but the redevelopment of the building is dead in the water.
Terra President David Martin had dangled $55 million to buy the air rights from the city, but grassroots opponents of the project claimed the value of the air rights was worth more than the developer’s offer, and protested that the agreement was made without a competitive bid process.
Opponents also objected to the city awarding a key parcel of public waterfront land for another condo development. Miami Beach Marina and the Monty’s site are at 300 to 400 Alton Road in the city’s South-of-Fifth neighborhood.
In a written statement, Martin did not address losing the air rights vote, and he still claimed victory.
“The results of yesterday’s vote make it clear that Miami Beach voters support our vision for a revitalized Miami Beach Marina alongside a package of community benefits and resiliency improvements to develop a ‘world class’ marina,” Martin said. “Our team will now work with the city to determine the path forward.”
Andrea Spiridonakos, a Miami Beach resident who founded the grassroots opposition group Save Monty’s, said Miami Beach voters saw through the slick campaigning put out by Terra and the city’s elected officials, who stumped for the developer’s proposal. “It wasn’t easy,” Spiridonakos said. “We fought against mega-money, the mayor and every elected politician.”
Voters did not want the city to sell a vital slice of public land to a private developer, she added. “It’s the last piece of public waterfront property in South Beach,” Spiridonakos said. “People hold it dear in their hearts.”
Martin once again turned to Bjarke Ingels Group, which designed Terra’s Grove at Grand Bay condo towers in Coconut Grove, to design the proposed 385-foot tower to replace the Monty’s building, which would have been demolished. The new building would have included about 60 condos totaling 275,000 square feet, as well as 45,000 square feet of retail, restaurant, office and marina space, and a 1-acre park.
The city originally entered into a lease in 1983 with the previous marina operator. That lease was supposed to expire in 2022. Now, Terra and Suntex will have a new 99-year lease.
Despite the election loss, Terra is building a lasting imprint in Miami Beach. The Coconut Grove-based developer is partnering with Crescent Heights to develop the Canopy Club and Canopy Park, a luxury condo project and a community park previously known as the 500 Alton development and later Park on Fifth. Martin is also teaming up with Turnberry Associates’ Jackie Soffer to develop the 800-room Miami Beach Convention Center hotel, which will be under the Grand Hyatt flag.
A renderings of the Shops at Sunset Place project and a rendering of the Surfside Town Center project
Voters weighed in on South Miami zoning rules, Surfside public property sales and Bal Harbour building heights, producing mixed results from Tuesday’s election.
South Miami
A referendum in the city of South Miami failed to pass on Election Day, so zoning vote requirements will remain the same. South Miami Referendum 1 proposed replacing a unanimous five-commissioner vote needed for zoning changes with a rule that would require only four commissioners to pass changes. The measure failed with a 51 percent “no” vote out of a total of 6,004 votes.
The proposed change to voting rules would have expanded to the rest of the city a change approved by voters in 2018 to require four commissioners’ approval instead of a unanimous five for commercial, industrial and mixed-use projects in the city’s downtown area.
That referendum came a year after city commissioners rejected zoning changes for a redevelopment proposal for the Shops at Sunset Place by a partnership among Federal Realty Investment Trust, Grass River Property and The Comras Co. In 2019, the developers received unanimous approval to transform the roughly half-a-million square-foot shopping center into a mixed-use site featuring a reimagined mall, a pair of apartment buildings and a hotel.
Surfside
Voters in the town of Surfside approved a measure placing new restrictions on the sale and lease of town-owned property.
Passage of Surfside Referendum 2 means that instead of a simple majority vote by three commissioners to sell or lease town-owned property, a buyer or a signer of a lease of more than three years must receive four commissioners’ approval, plus 60 percent of voters approval at a future referendum.
The measure passed with 74 percent, out of a total of 2,681 votes.
In 2018, residents opposed a major project approved by commissioners. A joint venture between Pointe Development and Monceau Realty withdrew its bid for a public-private partnership in Surfside after facing opposition from residents, despite receiving the votes to move forward with a $33.5 million project that called for a new town hall and civic center between 87th and 96th streets.
Voters in Bal Harbour approved the sole referendum on the ballot, which changes how the village measures maximum building height on single-family homes.
In the past, the village measured building heights from the street, not taking into account the state or federal base flood elevation. Now, the village will measure from the highest minimum base flood elevation required by state or federal law, as that changes. The measure is aimed at allowing greater height for homes.
According to the village charter, waterfront single-family homes can’t exceed two stories and 35 water feet in height. The height drops to 30 feet on dry lots.
The referendum passed with 77 percent of the vote, out of a total of 1,471 votes.
Recent sales in the village include $23.9 million for a mansion at 224 Bal Bay Drive and $5.5 million for a waterfront home at 122 Bal Bay Drive.
Floridians voted to pass two homestead-related amendments to the Florida Constitution on Election Day.
Amendment 5, the extension of the “Save Our Homes” portability period amendment, and Amendment 6, which grants a property tax discount for veterans’ widows, each received more than 60 percent of the vote in Tuesday’s general election. They will both go into effect on Jan. 1.
Amendment 5 gives homeowners up to three years to transfer their Save Our Homes benefit from a prior homestead to a new homestead. That’s up from two years. It received more than 74 percent of the vote.
Florida homeowners benefit from the homestead exemption, which allows property owners to receive an exemption that decreases the property’s taxable value by up to $50,000 if it is their principal residence. The Save Our Homes amendment was passed in 1992, limiting the annual increase in valuation of a homesteaded property to 3 percent.
Nearly 90 percent of voters supported Amendment 6, which allows the surviving spouse of a late veteran to receive the same homestead property tax discount. Spouses will be able to benefit from the tax discount until they remarry or sell the property. But if the spouse sells the property without remarrying, the tax discount – not exceeding the dollar amount from the most recent ad valorem tax roll – will be able to be transferred to a new residence.
Hilton Worldwide Holdings is still bleeding cash, but its CEO is confident the troubles are just temporary.
“We’ll see what happens with all of these crazy elections here in the U.S.,” Chris Nasetta said on the hotel giant’s third-quarter earnings call Wednesday. “Obviously, a lot going on in the world, a lot going on with the business.”
But when it comes to Hilton’s future, Nassetta said he is feeling “really good about the progress” despite posting a net loss of $81 million for the quarter, a steep fall from $290 million a year earlier. The company’s total revenues are down more than 60 percent year-over-year to $933 million from about $2.4 billion in the third quarter of 2019.
It’s an improvement from last quarter, when the company posted a net loss of $432 million and its revenues down 77 percent year over year.
The optimism comes from Nassetta’s belief that a significant change in attitudes toward travel is around the corner.
The CEO said he believes movement on a vaccine will be coming by the end of the year or early 2021, and once that and winter flu season is in the rearview mirror, “there’s a real opportunity for a step change.”
Hilton is noticing a pick up in business travel, albeit not from the company’s traditional business traveller. Instead, the hotel company has begun experimenting with a new offering, namely office space.
The pilot program, dubbed WorkSpaces by Hilton, where the company rents out hotel rooms as office space rolled out last month.
“A lot of people aren’t back in offices, so they need to have places to congregate, to have meetings,” Nassetta said. “Particularly for people that need to get out of their house and need Wi-Fi and need some space and privacy.”
Though Nassetta noted that the hotel-cum-office space is just temporary, he said it was a good stop-gap measure until typical demand for hotel rooms returns.
“The trick is this isn’t going to last forever,” he admitted. “[But] when we get to the other side of this … we won’t have let those muscles atrophy.”
Hilton is also continuing to construct and convert hotels into Hilton-branded properties. The company opened 133 hotels in the last quarter with a net growth of nearly 15,000 new rooms, or 4.7 percent.
The company’s development pipeline totalled more than 408,000 rooms at the end of September, an 8 percent increase year-over-year. Nassetta said net unit growth for the entirety of 2020 could be as high as 5 percent.
“The construction trades around the world, particularly here in the U.S., were ready to go,” said Nassetta. “Ninety-plus percent of what was under construction when we went into the crisis is back under construction.”
System-wide revenue per available room was down 60 percent for the quarter at about $45 per night with occupancy hovering around 42.5 percent and an average daily rate of $105.87. The uptick compared to last quarter was thanks to a combination of loosening travel and operating restrictions, and an uptick in demand from leisure travellers in the U.S. and China, per Hilton.
During the quarter, Hilton also brought back its furloughed corporate staff and plans on making other cost-cutting measures permanent until demand for events, business and leisure travel bounces back years from now. The company said 97 percent of its hotels were open as of Nov. 2.
“I do believe in my heart of hearts that when we get to the other side of this, we’re a bigger, better, stronger, more efficient higher margin business,” Nassetta said.
237 Brazilian Avenue with Todd Glaser and Stephen and Petra Levin (Corcoran, Getty, Glaser by Mary Beth Koeth)
UPDATED, Nov. 4, 5:50 p.m.: Beverage tycoon Stephen Levin and his wife, Petra, closed on two adjacent townhouses in Palm Beach after selling their waterfront Miami Beach home for $42 million.
Spec home developer Todd Michael Glaser, along with his partners Scott Robins, Philip Levine and Jonathan Fryd, sold the two 5,400-square-foot townhouses they developed to the philanthropist couple for a combined $13.7 million. Property records show Glaser’s 237 Brazilian Avenue LLC sold the townhouses at 237-239 Brazilian Avenue to Brazilian PB Land Trust. Glaser said the villas sold for about $14.8 million, including commissions and other costs.
In late October, the Levins sold their mansion at 4358 North Bay Road in Miami Beach to billionaire Shutterstock founder Jonathan Oringer, setting a new record for waterfront home sales on North Bay Road.
For the Palm Beach sale, Suzanne Frisbie with Premier Estate Properties was the listing agent, and Paulette Koch of the Corcoran Group represented the buyer. Koch declined to comment on the buyer’s identity.
“They wanted to familiarize themselves with Palm Beach, and we really scoured the market and looked at a number of properties,” she said.
Stephen Levin founded Gold Coast Beverage Distributors, one of South Florida’s largest beverage wholesalers, and sold it in 2014 for more than $1 billion. In June, West Palm Beach-based MorseLife Health System announced a $5 million gift from the couple. Stephen Levin serves as the nonprofit’s chairman.
The villas have a total of 10 bedrooms, 10 bathrooms and four half-bathrooms, according to the listing. They each include gardens, an interior courtyard and pool, open kitchens and family rooms, master suites, and four-car garages. Portuondo-Perotti designed the townhouses.
Glaser is under contract to purchase the Palm Beach property owned by the late financier and convicted sex offender Jeffrey Epstein, at 358 El Brillo Way.
The Miami Beach and Palm Beach developer has been active in recent months in both markets. He recently sold the waterfront spec mansion at 6650 Allison Road in Miami Beach for $15.2 million.
125 West End Avenue and 450 W 126th Street (Photos via Google Maps and SLCE Architects)
Life science lease deals and building conversions have been popping up across New York City and other major commercial real estate markets — perhaps in surprising places.
At 450 West 126th Street in Manhattanville, a former bakery is getting a fresh start as the Taystee Lab Building, Janus Property’s planned 350,000-square-foot life science hub. At 125 West End Avenue on the Upper West Side, Taconic Partners and Nuveen Real Estate are converting a former Disney-owned ABC campus into a 400,000-square-foot research center. And at 30-02 48th Avenue in Long Island City, Alexandria Real Estate announced plans to turn a building once used for book binding into more than 175,000 square feet of laboratory and office space.
All three projects predate Covid-19. But the pandemic may give them an even greater advantage, as other commercial properties struggle to stay relevant. At Hudson Research Center, another Taconic project with Silverstein Properties, for example, the New York Stem Cell Foundation, HiberCell and the Rogosin Institute lease office and lab space.
“One of the reasons New York, historically, has not experienced the same growth [with life science companies] as Boston and San Francisco is because you just haven’t had the real estate for it,” said Matthew Weir, a senior vice president at Taconic. “You’re starting to see that really take off now.”
While some of the locations may seem atypical for biomedical buildouts, they are helping breathe new life into a major sector of real estate that’s taken a huge hit since March. And as New York’s beleaguered office market finds new long-term tenants across several key areas of life sciences, retail landlords are starting to question if the same fate could await them.
Established and emerging life science hubs that include New York, Los Angeles and Chicago are poised to benefit from “pandemic-related tailwinds,” with the global prescription drug market expected to surpass $1 trillion by 2022, according to a report from JLL. In the cities that have longstanding ties to life sciences, employment in the field has been booming while commercial property vacancies remain low. In Boston — where 19 of the 20 biggest biotech and pharmaceutical firms have a presence — employment growth has hit 23 percent over the past five years, while commercial vacancies are at an average 6 percent. In the San Francisco Bay Area, another leading market for life sciences, employment has increased 21 percent in the same period, with vacancies just over 7 percent.
“It’s primetime, with the spotlight on the industry, to raise capital,” said Michael Brown, a commercial real estate broker with Colliers International who leads the firm’s national life science team out of Florida.
“And capital raises [for life science tenants] are exceeding even the most aggressive expectations before the pandemic,” Brown added.
Retail Rx
As many restaurants and other retailers struggle to find their footing in the age of Covid, with thousands closing their doors permanently, leasing challenges are taking a big toll on Manhattan’s retail market, an October CBRE report found.
Active retail leasing volume for the 12 months ending in September totaled 2.67 million square feet, down by nearly a third from the 3.9 million square feet from the same time period a year ago. And asking rents across Manhattan’s 16 main shopping corridors have fallen to $659 per square foot during the third quarter, down 12.8 percent from the same time last year, and the lowest level since 2011.
The city’s office market is seeing the opposite effect with space outfitted for biomedical and other life science tenants, according to a separate CBRE report. Asking rents for lab space have been steadily rising, hitting an average $95.39 square foot across the city in the first half of 2020, up from $88.72 at the year end of 2019. Meanwhile, available lab space for immediate occupancy remains scarce, at just over 2 percent.
And for those who have been able to leverage the tight supply, the money has followed. In New York alone, more than $1 billion of venture capital funding poured into life sciences last year, up from $990 million in 2018 and $366 million in 2017, making New York one of the fastest growing markets for commercial tenants in the field, according to JLL.
“The relationship between supply and demand is probably going to always be a little bit out of sync,” said Joe Fetterman, an executive vice president at Colliers who specializes in healthcare and life sciences. “But, those developers that are in the ground or planning to be in the ground immediately are feeling pretty safe about their bet.”
While vacant retail offers a wealth of potential space for life science tenants, it’s not always a simple formula. Audrey Symes, JLL’s director of healthcare and life sciences research, told The Real Deal by email that while “the idea of retail-to-lab conversions is intriguing given the general parameters,” there are several impediments built into many properties.
Commercial labs require very specific ventilation and ceiling heights, water power, sewage and other infrastructure that a ground-floor retail space may not be able to accommodate. Buildings must also abide by zoning regulations for larger labs to operate, which puts “a natural limit on the scale of these conversions,” Symes noted.
Even with office properties, that’s one of the reasons it can be such a challenge to find the perfect space — regardless of the building’s previous use. Healthcare fund manager Deerfield Management, for example, almost gave up on trying to find space in Manhattan for the research lab Cure until it came across 345 Park Avenue South.
Deerfield, which oversees about $8 billion in assets, purchased the 12-story building from RFR Realty for $345 million last year and has spent more than $200 million to convert the 300,000-square-foot property into lab space. Cure’s new homebase is expected to generate upwards of $160 million in tax benefits for the city, according to a 2019 analysis by the city’s Industrial Development Agency.
“Every inch of it is constructed to be a lab,” Deerfield managing partner James Flynn said of the converted space.
Outside the box
While smaller retail spaces throughout Manhattan and other dense parts of New York would be too tight of a fit, malls and shopping centers outside of the city’s core may be more adaptable. The same goes for large warehouses and other industrial properties, many of which are already being upgraded as last-mile and logistic centers for e-commerce companies.
With upgrades similar to those seen in large office buildings — following the necessary zoning laws and other protocols for lab space — fewer hurdles may exist.
“There’s absolutely no doubt in my mind that it’s possible,” said Matt Malone, an associate principal at the design firm Perkins & Will, who specializes in science and technology projects in New York. “From a sustainability perspective, it makes a lot more sense for us to reuse the existing building stock than it does for us to completely raze it and start over.”
Malone, who is involved in the redevelopment of 125 West End Avenue, noted that his firm similarly repurposed a former standalone big-box retail property for the University of Rochester Medical Center.
Other businesses that provide healthcare services, including doctors’ offices and drug stores, have been using storefront and strip mall spaces for decades. More recently during Covid, urgent care centers have opened walk-in locations, as medical needs increase and retail rent prices come down.
“It’s a great way to get exposure” for your services, said Evan Gasman, a real estate agent with Carr, a specialty brokerage that represents healthcare companies looking for space.
And the upsides could be even greater for property owners looking for creditworthy tenants.
“For the most part, [doctors’ offices and medical labs] are a recession-proof business,” Gasman noted. “They’re not restaurants, they’re not anything that is remotely high risk.”
Prospective buyers continued to sign contracts for both condos and houses throughout South Florida in October
Prospective buyers continued to sign contracts for both condos and houses throughout South Florida last month.
Miami-Dade, Broward and Palm Beach counties all experienced annual increases in the number of new residential contracts signed, according to a monthly report from Douglas Elliman. Not all signed contracts will close, and the report is meant to provide a market snapshot.
Unlike earlier on in the pandemic, condo contracts also rose throughout South Florida, according to the report, which is authored by Jonathan Miller’s Miller Samuel Inc.
Here’s a breakdown of each county:
Miami-Dade
New single-family contracts signed in Miami-Dade County rose 12 percent year over year to 1,372 contracts, but still lagged below a one-year record high in July.
Gains at the high end of the market — homes priced at more than $1 million more than doubled year over year to 201 contracts — offset fewer contracts signed at the lower end of the market. For homes priced under $200,000, new contracts fell by 62 percent year over year to 25 contracts in October.
Newly signed condo contracts in the county grew 13 percent year over year to 1,498 contracts in October. Again, gains in the lower-middle market — condos priced between $300,000 and $399,000 grew 66 percent to 286 contracts — were offset by decreases toward the lower end of the market. The county saw 382 contracts signed for condos valued at less than $200,000, a 19 percent annual drop.
More than 800 contracts were signed for condos under $300,000.
In Broward County, nearly 800 single-family contracts were signed last month, marking a 45 percent annual increase. The middle of the market saw the biggest surge, with an 86 percent jump in contracts signed for houses priced between $500,000 and $599,000, up to 80 contracts.
Most of the contracts signed were for homes in the $300,000 to $399,000 range, which saw 238 contracts signed during the month.
There was also an increase in condo activity. Nearly 950 contracts were signed for condos last month, up 86 percent from October 2019. Contracts for condos priced at more than $1 million increased sevenfold to 23 contracts.
Nearly 500 contracts were signed for condos priced at under $200,000.
Palm Beach
Palm Beach County continued to see the biggest percentage increase in activity. In October, new signed contracts for single-family homes grew 90 percent year over year to 527 contracts. The largest gains were at the higher end of the market: homes priced at more than $1 million nearly quadrupled year over year to 109 contracts.
But homes priced between $300,000 and $499,000 saw the biggest number of signed contracts, at about 200 in October.
Condo contracts increased by 155 percent year over year to 612 contracts countywide. Most of the percentage gains were at the high end of the market, with condos priced at $800,000 and higher increasing almost fivefold to 47 contracts.
At 280 contracts, most of the newly signed condo contracts in October were for units priced at below $200,000.
13951 Chester Bay Lane, North Palm Beach (Courtesy of Douglas Elliman)
UPDATED, Nov. 5, 11:37 a.m.: An insurance executive sold his waterfront North Palm Beach home for $6.8 million.
Records show John T. Fleurant and his wife, Marguerite, sold the house at 13951 Chester Bay Lane to Nikola Kozul, principal at Merrillville, Indiana-based Bayshore Properties, according to his LinkedIn.
Fleurant is the executive vice president and CFO of Des Moines, Iowa-based FGL Holdings, a life insurance company. He was formerly executive vice president and CFO of New York Life from 2013 to 2019. Before that, he was the financial controller at Prudential Financial.
Douglas Elliman’s Ann Patricia Cusa and Charlie Forcucci represented the Fleurants in the recent sale, and Marilyn Griffin of Premier Realty Group represented the buyer.
The Fleurants bought the home in 2017, the same year it was built, for $4.5 million, records show.
The house hit the market last year at $7 million, then dropped to $6.9 million in August, according to the listing.
The 7,753-square-foot house has six bedrooms, five full bathrooms and two half-baths. The outdoor area features 100 feet of direct Intracoastal Waterway access, a 45-foot boat dock with a boat lift and a pool.
The North Palm Beach sale is among many other high-priced deals this year. A race car driver sold his waterfront home for $5.3 million, Rockstar Energy Drink founder Russell Weiner flipped his North Palm Beach homes for more than $48 million, and a former ambassador to Austria bought a house for $6 million.
Senate Majority Leader Mitch McConnell has signaled he wants another economic relief package passed in the next two months.
But with Republicans poised to retain control of the Senate, Democrats lack leverage to demand approval of their multi-trillion-dollar stimulus bill, which McConnell opposes.
“We need another rescue package,” the Kentucky senator said Wednesday, according to the Wall Street Journal. “Hopefully the partisan passions that prevented us from doing another rescue package will subside with the election. We need to do it, and I think we need to do it before the end of the year.”
Democrats and Republicans have been at loggerheads for months over the next package, with Democrats pushing for one that includes a bailout of state and local governments. New York officials have said they need about $50 billion, while the Metropolitan Transportation Authority is seeking $12 billion and the Port Authority of New York and New Jersey wants $3 billion.
McConnell has thrown his support behind more funding for schools, hospitals and small businesses. But Republicans have rejected the Democratic proposal championed by House Speaker Nancy Pelosi, and argue that the election results, while not final, will change the dynamics in the House and Senate.
“It’s a much different place,” House Minority Leader Kevin McCarthy told the Journal. “Nancy Pelosi has a weaker hand. The Democratic members who lost want to vote for something more reasonable, not her $3 trillion bill.”
Senate Republicans, wary of the nation’s ballooning budget deficit, have proposed a measure one-sixth that size. The negotiations have implications for the real estate industry, as congressional aid packages have been credited with providing crucial support for the economy throughout the pandemic.
Keller Williams’ Josh Team and Gary Keller (Photos via Keller Williams; Keller Capital)
Buoyed by the national housing rebound, Keller Williams’ third-quarter sales volume grew 25.4 percent year-over-year, hitting $127.5 billion, the company said Thursday.
The brokerage franchise saw a sharp drop in sales during the second quarter as the pandemic froze homebuying. But it’s since rebounded: The number of contracts inked during the third quarter was up 21.1 percent year-over-year. As of Sept. 30, listings were up 5.2 percent.
For Keller Williams agents outside the U.S., sales volume surged nearly 55 percent year-over-year to $1.8 billion, and signed contracts were up 38.2 percent year-over-year as of Sept. 30.
“Our agents experienced their most productive quarter ever in Q3,” Josh Team, the firm’s president, said in a statement. Despite the pandemic, he said the pace of sales was “unprecedented” as the firm rolled out tools to help agents adapt to new ways of doing business.
“We know we can’t expect things to go back to the way they were,” he added.
Team said that Keller Williams agents outpaced national sales trends. According to the National Association of Realtors’ third-quarter report, closed transactions in the U.S. were up 12.8 percent year-over-year. In September, sales of previously owned homes rose to 6.5 million, a jump of 9.4 percent compared to August.
Based in Austin, Texas, Keller Williams is the largest brokerage franchise, with 173,327 agents worldwide. In the U.S. and Canada, it had 161,885 agents, up 2.7 percent compared to the second quarter.
In recent years, Keller Williams has shifted its focus to technology, saying it would invest $1 billion into tools to help agents. The company said Command, its CRM tool that launched last year, had 143,104 users as of Sept. 30, up 7.3 percent quarter-over-quarter.
During the third quarter, social media advertising tools netted its agents nearly 723,363 leads from Facebook and Instagram, roughly the same as the second quarter. The average cost per lead was $1.69.
In recent weeks, Keller Williams has been adjusting to a major change in its C-suite.
Last month, co-founder Gary Keller stepped down as CEO, with Josh Team, the company’s president, assuming his responsibilities. Keller served as CEO since 2019 but had long been the face of the brokerage. He is now serving as executive chairman of the board.
Barry Sternlicht is confident the hotel and office markets will come back to pre-pandemic levels, saying that adults and kids “want to go back to the lives they had before.”
Still, the Starwood chairman and CEO criticized New York Mayor Bill de Blasio, without referring to him by name, saying the mayor is “bordering on insanity” as indoor dining remains restricted in the city.
“New York City is in a world of hurt. I’m really glad we don’t have exposure there,” Sternlicht said during Starwood Property Trust’s third quarter earnings call with analysts on Thursday morning. “We stayed away from those markets permanently because of the pressure on costs” and increases in real estate taxes.
Sternlicht made little mention of the election, but expects there to be a stimulus package regardless of who wins. That will propel people back to the office, he said, citing Facebook’s 730,000-square-foot lease at Vornado Realty Trust’s Farley Post Office redevelopment in New York.
“Don’t confuse pandemic behavior with the long-term social patterns of human beings,” Sternlicht said.
Miami Beach-based Starwood reported $151.8 million in third quarter earnings, or 52 cents per share, up 8 percent from the same period in 2019. The real estate investment trust reported $267.4 million in revenue for the third quarter, down 7 percent from $288.3 million in the third quarter of last year. The company’s stock rose 2.6 percent to $14.88 per share as of 11:50 a.m. Thursday, following the earnings call.
Starwood deployed $1.5 billion in the third quarter, and completed two debt raises totaling $600 million, said Rena Paniry, the company’s CFO. Starwood also reported $150 million in earnings for its commercial and residential lending portfolio.
Starwood has more than $880 million of cash and undrawn debt capacity, and Sternlicht said the REIT will keep about $450 million in liquidity. He referred to the company’s “huge earnings power” that it can harvest when needed.
“We’re not cowboys. We do think things could go wrong,” Sternlicht said, later adding that, “real estate is a four-letter word in the capital markers right now.”
Jeff DiModica, president and managing director, said the company is not forced to only invest in commercial real estate loans, and Sternlicht touted Starwood’s diversification.
“Although we are not out of the woods from Covid, we are very pleased,” DiModica said.
Sternicht was optimistic about the return of hospitality, and said he’s not concerned with increases in positive coronavirus cases because of improvements in testing.
“There will be a vaccine at some point,” he said. “There will be international travel at some point.”
Sternlicht, who previously said he planned to vote for former Vice President Joe Biden, made his only comments about the election when he signed off.
“I was going to say something like ‘May your favorite candidate win,’ but I don’t know who that is so… Have a good election.”
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As the industry remains in suspense, many are huddling around their televisions, compulsively checking Twitter, and generally waiting with bated breath for an election verdict. Whichever way the pendulum swings, it will undoubtedly have a huge impact on real estate for the next four years.
We’ve spent the last few weeks parsing out Trump’s real effect on real estate, wondered what a Biden presidency would be like, and surveying industry folks for their thoughts.
We are officially tired out. We suspect you are too, no matter your political affiliation.
As we hunker down for what could be a long wait, it’s high time we all practiced some self care.
Check out our list below for a few products that might help you manage the days, weeks, or possibly years ahead.
Keep your feet cozy, even if you’re walking on eggshells with family and friends. These Ugg slippers (which come in men’s and women’s varieties) are sure to bring warm toes, even if you’re getting cold feet about the election.
While cozying up in your slippers, you can slip on a mud mask like this one with minerals straight from the Dead Sea. The pandemic might have deterred you from moving to another country if your preferred candidate loses, but at least you can remind yourself what traveling felt like with this spa-like experience.
Once you’ve masked up and settled in, you’ll want this luxurious weighted knit blanket to cuddle under. The weight is meant to reduce anxiety — exactly what we all need right now.
If lounging around only causes your stress to mount, sweat it out instead with this portable home gym kit. Maybe it’s just the endorphins, but getting a workout in (even if Fox News or MSNBC is on in the background) almost makes it feel like everything is normal again. Or at least it’ll make you feel productive.
On the other hand, you could stress eat. Sinful and classic Godiva chocolates can’t be beat for the sugar rush you’re craving after a long night of flipping through news channels. It’s been a long election, and we all deserve to indulge a little.
Lastly, when all else has failed, pour yourself a drink. Q makes tonics in different flavors that are all perfect for a G&T with an unusual twist. Even if you’re not a drinker, the bubbly water helps calm a nervous stomach.
Douglas Elliman is still reeling from New York City’s struggling residential sector, but activity in its other markets has buoyed the brokerage’s earnings.
The firm reported $11.8 million in net income during the third quarter, driven by surge in closed sales in Los Angeles, Aspen, the Hamptons and South Florida markets. That’s up 521 percent from the $1.9 million in net income the brokerage reported in the third quarter of 2019. Quarterly revenues ticked up 3 percent year over year to $208 million.
Howard Lorber, Elliman’s chairman and Vector’s CEO, said the brokerage’s other markets “managed to make up a lot of what we lost in New York,” where sales volume remains down 46 percent year over year.
“We’re in [a] good position because of our strategy of being in other markets,” he told investors during Vector’s third-quarter earnings call Thursday. “Just about every one of our other markets is performing well. Some of them, multiple times of what they were before, especially South Florida.”
Though Lorber admitted New York City’s market was not bouncing back “as fast as we’d like to see,” he said deals at all price points are beginning to get done, signaling a marginal recovery.
During the third quarter, Elliman wrote down $58.3 million related to the firm’s trademark and goodwill.
The brokerage also incurred $3.3 million in expenses from its cost-cutting measures, which include reducing its office footprint and cutting 25 percent of its personnel. Lorber noted that, excluding the associated costs, the firm has saved about $40 million so far this year.
All told, Elliman’s net loss is $62.2 million year-to-date, a huge drop from $6.6 million in net income over the same period last year.
Lorber said it’s difficult to compete with the second quarter of 2019, which was record-setting in terms of closings, particularly considering the “dramatic effect” of Covid this year. Elliman’s revenues sank by 45 percent with the firm reporting a net loss of $5 million last quarter, when the effects of the pandemic were most pronounced.
Vector’s real estate segment, which includes both Elliman and development arm New Valley, saw revenue increase 14 percent year over year to $229 million.
Lorber said New Valley’s contribution to that increase in revenue was the $20.5 million sale of a Hamptons estate he developed at 25 Potato Road in Sagaponack. But Lorder told investors on the call that despite the Hamptons market being red hot, the mansion’s sale in late August did not translate into profits.
“We didn’t make any money on it,” said Lorber. “Maybe we made a few dollars on it but not great because the market sort of collapsed, went down after that.”
The 4,857-square-foot oceanfront mansion was first listed in 2018 for just under $30 million.
Vector’s real estate segment reported a net loss of $4.1 million for the quarter, compared to a net income of $7.2 million last year. It also saw a 25 percent increase in cost of sales to $170 million, from $136 million during the same quarter last year.
Vector’s real estate segment reported a net loss of $4.1 million for the quarter, compared to a net income of $7.2 million last year.
“We have seen a migration of our sales at Douglas Elliman from the higher-margin New York metropolitan area to lower-margins areas such as South Florida and Southern California,” said Bryant Kirkland, Vector’s chief financial officer.
Newmark reported earnings of $152.1 million in the third quarter, down 25 percent from the same time last year. The brokerage said it experienced a drop in sales and leasing commissions due to Covid-related challenges.
On Thursday’s call with investors, the company’s chief executive addressed a question on potential mergers and acquisitions. CEO Barry Gosin likened Newmark’s M&A activity to an elite stealth operator.
“We kind of consider ourself more in the Navy SEAL category,” Gosin said. He added, “We’ve done fairly well by doing acquisitions of the right people that fill the right space in our company.” He noted Newmark acquired 50 smaller companies over the years.
M&A activity has been a hot topic of discussion in the commercial brokerage space lately. Newmark reportedly rejected a takeover bid from Cushman & Wakefield recently.
Earlier this week, JLL CEO Christian Ulbrich said the company has a growing pipeline of M&A deals, but hadn’t “seen anything we think would be worth spending our shareholder’s money on.”
JLL and Cushman had reportedly been in talks about a merger, but they ultimately fell apart.
In 2014, OneTitle launched with an audacious goal: eliminate agents and offer title insurance for much less. Six years later, the VC-backed startup is being liquidated, the apparent victim of an opaque industry controlled by a handful of players.
Last month, a New York judge approved OneTitle’s liquidation, which was being sought by the state Department of Financial Services, the agency that oversees the insurance industry. All policies will be canceled, effective Nov. 5.
According to court documents, OneTitle’s business, which set out to transform the industry, had stalled sometime in 2018. It began winding down operations that year, and it has not written new business since 2019. “OneTitle has less than $400,000 in assets and its assets are eroding as expenses come due,” according to a Sept. 3 petition filed by DFS Superintendent Linda Lacewell.
In New York and elsewhere, underwriters have worked together to set rates for the industry for decades but OneTitle aimed to break from that tradition. And the company’s start was auspicious.
Founded by Seth Brown and Daniel Price, OneTitle raised $17 million from investors, including $13 million from White Mountains Insurance Group, a public underwriter based in New Hampshire. From the outset, it sought to set its own rates by working directly with homeowners and developers and cutting out insurance agents.
In 2017, OneTitle got approval from state regulators to slash its rates by 25 percent on deals exceeding $15 million. In short, someone who bought a $50 million condo could purchase a OneTitle policy for $77,597 compared to a standard policy of $103,920.
Nationwide, the $15 billion title insurance industry is dominated by Fidelity, First American, Old Republic and Stewart. The “Big Four” account for 90 percent of the market, according to the American Land Title Association.
In recent years, New York regulators have tried to crack down on the title insurance industry, which it accused of wining-and-dining clients to win business. But title insurers have mounted legal challenges to a 2018 DFS directive aimed at ending heavy spending. An August 2019 court decision reversed the DFS ban; in January, a state appeals court reinstated the ban.
OneTitle’s own effort to change the industry soon hit a wall. In 2018, both Brown and Price left the company, according to their LinkedIn profiles. And a year after regulators approved its new rate model, the company tried to sell itself, according to an April 2 letter to DFS. Signed by its board of directors, the letter said OneTitle discussed a possible business combination with Munich Re, a publicly traded reinsurance firm in Germany, and the Related Companies. Neither deal panned out.
In June 2019, it entered a purchase agreement with Ameristract, a New York-based title insurance firm.
But Ameristract was unable to obtain financing to complete the deal, OneTitle wrote in the letter to DFS. In late March, Ameristract terminated its rights under the contract. “With Ameristract no longer a viable buyer, there is no market for OneTitle, and OneTitle has no recourse to additional capital or financial resources,” the letter said.
Representatives for OneTitle did not respond for comment.
Adam Cohen and 151 West Alexander Palm Road, Boca Raton (Caspian Capital, Royal Palm Properties)
A financier couple spent $12 million on a spec mansion in the Royal Palm Yacht & Country Club in Boca Raton.
Adam and Samara Cohen bought the home at 151 West Alexander Palm Road from M.Y.N Investments LLC, according to records. Nadav Houri signed as a managing member of M.Y.N Investments. Houri started the real estate investment company in 2008, according to his LinkedIn profile.
Adam Cohen is a managing partner at New York-based Caspian Capital LP, an investment adviser focused on investing in corporate credit markets, according to its LinkedIn page. Samara Cohen is currently the managing director and co-head of iShares markets and investments at New-York based investment management firm BlackRock.
Records show Houri bought the property in 2017 for $3.2 million. In 2018, he demolished the existing home and began building a new house. Houri then transferred ownership to M.Y.N Investments for $2.4 million in December 2019.
The Boca Raton home was completed this year, but hit the market in May 2019, with an initial asking price of $15.5 million, according to Realtor.com. The price dropped to its most recent listing of $12.9 million in August. David W. Roberts of Royal Palm Properties brokered the deal.
The 8,904-square-foot home features five bedrooms — four of which have access to an outdoor balcony, five full bathrooms, three half-bathrooms, a 600-bottle capacity wine room and a three-and-a-half car garage. The outdoor area has a rooftop viewing deck with a putting green, 120 feet of water frontage and a pool, according to the listing.
The Royal Palm Yacht & Country Club has had a number of big sales in the past few months. Billionaire building supplies businesswoman Maggie Hardy-Knox bought a newly built Royal Palm Yacht & Country Club mansion for $15.9 million, a mansion in the neighborhood sold for $9.4 million, and a Boca Raton plastic surgeon bought a mansion for $5.5 million.
Raj Dhanda and 11000 Cameron Court (Credit: Google Maps)
Real estate management firm Black Creek Group bought a 340-unit apartment complex in Davie for $79.1 million.
Black Creek, based in Denver and led by CEO Raj Dhanda, bought the complex at 11000 Cameron Court for about $233,000 a unit, according to records.
Los Angeles-based investment firm CIM Group sold the complex, which was built in 1998. It last sold in 2007 for $57.75 million, according to records.
An online listing shows one-bedroom to three-bedroom units available from 751 square feet to 1,298 square feet, renting for $1,490 a month to $1,927 a month.
In August, CIM closed on one of the biggest multifamily deals that the Northern Virginia market has ever seen: $506 million for the 2,311-unit Southern Towers in Alexandria, just outside Washington, D.C.
In June, CIM backed out of a deal to buy the 869,000-square-foot Baldwin Hills-Crenshaw Plaza mall in California for more than $100 million.
CIM received at least $5 million through the Paycheck Protection Program this year for the Dominick at 246 Spring Street in New York, formerly known as Trump Soho.
In December, Black Creek Group bought a warehouse and distribution center in Weston for $32.4 million.
Other recent multifamily deals in South Florida include $18 million for the Federation Davie Apartments in Davie, and a 72-unit low-income housing building in Opa-locka sold for $8.2 million.
While cozying up in your slippers, you can slip on a mud mask like 
Once you’ve masked up and settled in, you’ll want this luxurious 
If lounging around only causes your stress to mount, sweat it out instead with this portable 
On the other hand, you could stress eat. Sinful and classic 
Lastly, when all else has failed, 
